This post was inspired by How Do People Survive on Minimum Wage. Andrea is asking for real life examples and I immediately thought of my aunt and uncle who have been working for minimum wage for the past 4 years. I asked my aunt and uncle to share their budget on how they manage to survive and even save on a minimum wage income and they agreed as long as I do not publish any names.
Background info: My aunt and uncle both work at the same packing factory and earn minimum wage. They do not receive government assistance of any kind. They live in a suburb of New York City and take 2 buses to work. Total travel time of at least one hour each way and two hours each way when it snows.
Fixed Monthly Expenses:
Net monthly income for two @ $7.50 per hour: $2079 ($1039.50 per person)
Rent including all utilities & internet: $700 (Shared bathroom & kitchen with another couple)
Transportation: $208 (NYC Monthly MetroCard $104 per person)
Food and household goods: $450
Uncle’s cigarettes: $90
Fun money/misc: $100
Total Monthly Fixed Expenses: $1563
Monthly Savings: $516
Yearly Savings: $6192
Savings for the past 4 years: $24,768
My aunt and uncle also earns additional income when they work overtime but they earmark those funds for vacation. Because of that, they have been able to afford a 1 week vacation every year!
Here are some of their tips:
(1) Move to a place with a strong public transportation system. The cost of car ownership is too high on a minimum income budget.
(2) Prepaid cellphones only. The T-Mobile rechargeable cellphone cards costs $100 for 1000 minutes.
(3) Shared accommodations is a must as expenses will be drastically reduced.